By Elliot Raphaelson, Tribune Media Services
It is no secret that those serving in our armed forces and their families often face significant financial hardship. Military families are almost twice as likely as other Americans to have credit card balances of more than $10,000, according to USA Today, and one in three enlisted personnel and junior non-commissioned officers borrow from high-interest lenders such as payday loan shops.
Fortunately, there are resources that provide assistance both to servicemembers on active duty as well as veterans. The Consumer Financial Protection Bureau (CFPB), a new federal regulatory agency, has established an Office of Servicemembers Affairs, and part of its mission is to educate members of the military and veterans of their rights regarding credit cards, mortgages, foreclosure assistance programs and other personal finance matters.
The head of this CFPB office, Holly Petraeus, is an excellent asset to servicemembers. (She is married to retired U.S. Army General David Petraeus, the current director of the Central Intelligence Agency.) She has been instrumental in developing workshops at the Better Business Bureau, and one of her objectives is to track scammers who target servicemembers, in order to make sure that such fraudulent behavior is stopped.
The CFPB website for servicemembers (www.consumerfinance.gov/servicemembers/) is a great clearinghouse for information, including a section called “Protecting your finances.” The site describes one common con game in which a person knocks on a servicemember’s door or makes a cold call by phone, offering to help him or her apply for U.S. Department of Veteran Affairs (VA) benefits. This is almost always a scam, since the VA generally doesn’t make house calls or use telemarketers.
If this happens to you, do not provide any personal information that can be used to access your financial information. If you believe the caller may be legitimate, which is unlikely, ask for credentials, which you can verify independently with the VA. Under no circumstances should you provide any personal information based on an initial contact without verification with the VA.
Information and access to veteran benefits is available online through the VA. Information regarding a certificate of eligibility for a VA Home Loan Guarantee is available fromhttp://www.benefits.va.gov/homeloans/eligibility.asp. Military personnel and veterans can register with the VA online at vabenefits.vba.va.gov in order to get information regarding benefits.
Longstanding laws for servicemembers have been updated to address the financial stresses that are all too common today. The Servicemembers Civil Relief Act (SCRA) provides, among other benefits, credit card interest limitations. The maximum allowable rate is 6 percent for the amount that is outstanding before active duty. Send your credit card issuers a copy of your military orders within 180 days of enlistment, and the 6 percent maximum will be retroactive from the date of enlistment. The act also applies to reservists and guardsmen. The credit card company can charge its normal interest rate for new purchases.
The SCRA also has other provisions that benefit servicemembers with respect to rental leases and mortgages. For example, servicemembers and families are protected from eviction while on active duty due to nonpayment of rents covering leases up to $2932.31 per month. A servicemember who receives permament change of station orders and is deployed to a new location for 90 days or more has the right to terminate a lease. If you believe your rights have been violated, you should contact the nearest Armed Forces Legal Assistance Program.
The Uniformed Services Employment and Re-employment Rights Act provides protection to servicemembers after they separate from active duty. Specifically, the act provides protection regarding re-employment in the jobs held prior to going on active duty. In addition, it provides protection regarding health and life insurance, and allows servicemembers to make up retirement-plan contributions they missed while serving. If your rights have been violated, contact Veterans Employment and Training Service (www.dol.gov/vets/contacts/main.htm).
Our servicemembers have made significant financial sacrifices. Fortunately, Holly Petraeus and the CFPB are providing a useful service in educating our military about existing programs and legislation that provide financial assistance, and remedies to protect their rights. Make sure the servicemembers in your family and in your community are aware of these rights.